South Korean lawmaker Kim Nam-kuk could face up to six months in prison for allegedly failing to fully declare 9.9 billion won (currently equivalent to $7.4 million) in cryptocurrency assets, sparking controversy over the transparency of officials' assets.
A South Korean lawmaker is facing a six-month prison sentence for allegedly failing to fully declare his cryptocurrency holdings, Dong-A Ilbo reported on December 18. The case centers on Kim Nam-kuk, a former member of the Democratic Party, who allegedly declared assets worth only 1.2 billion won (US$834,356 at the time of the original article's publication) in 2021, when he actually owned 9.9 billion won worth of cryptocurrency.
Mr. Kim is also accused of hiding an additional 990 million won in cryptocurrency in 2022. Prosecutors in Seoul have requested a six-month prison sentence for Mr. Kim for this act.
The charges against Mr. Kim center on his obstruction of the National Assembly Ethics Committee’s asset review process by making false statements. Failure to fully disclose cryptocurrency holdings is considered a serious violation, as holdings of such assets can lead to conflicts of interest for elected officials. South Korean law requires officials to disclose their assets to ensure transparency and avoid potential conflicts of interest.
Controversy Over Cryptocurrency Sell-Offs and Tax Laws
The case was further complicated by earlier allegations that Mr. Kim had sold millions of dollars worth of cryptocurrency just before South Korea implemented the FATF Travel Rule, which is intended to increase oversight of cryptocurrency transactions and has raised concerns that officials could use insider information for personal gain.
Mr. Kim denied the allegations, saying he only transferred the money to another exchange and was not obligated to declare it to the government.
It is worth noting that Mr. Kim, after taking office in 2020, participated in the drafting of laws related to digital assets. He was one of the supporters of the Democratic Party's proposal to delay the application of a 20% tax on profits from cryptocurrencies.
The tax was originally scheduled to be implemented in 2023, but was later delayed to 2025, and most recently, the National Assembly approved a two-year extension to 2027. Kim's involvement in this legislative process while also being accused of hiding his cryptocurrency assets has raised many questions about his objectivity and ethics.
